Oil prices fall after Trump calls on OPEC not to cut supply

Marco Green
November 14, 2018

Brent is in so-called "bear market" territory alongside USA crude as it has fallen by more than 20% since its peak - $86 in early October.

The latest drop in price comes after US President Donald Trump tweeted on Monday that he hoped there would be no oil output reductions, after Saudi Arabia said on Sunday that Opec was considering cutting supply next year.

Oil prices have fallen sharply to levels not seen for nearly a year as traders see a return of a glut in supplies at a time of falling demand.

US Oil is now at 58.71.

They famously ruled out curbs, instead battling to maintain market share versus USA shale, as Brent hit lows below $30 in early 2016.

Merrill Lynch says USA crude production will break through 12 million bpd in 2019, supporting oil exports to the rest of the world.

"Sky-high production in the USA, coupled with incremental barrels coming from Saudi Arabia and Russian Federation, is starting to impact oil market balances", Bank of America Merrill Lynch analysts said in a note to clients, adding: "Crude oil inventories are starting to increase once again".

Saudi Arabia is the largest member of the Opec cartel of Middle East and African oil producers.

US West Texas Intermediate (WTI) crude oil futures were at $59.00 per barrel at 0014 GMT, down 93 cents, or 1.6 percent from their last settlement.

Merrill Lynch says U.S. crude production will break through 12 million bpd in 2019, supporting oil exports to the rest of the world.

Saudi Energy Minister Khalid al-Falih had already said on Monday that Opec had agreed there was a need to cut oil production next year to prevent oversupply.

Oil production is not just rising in the United States.

"The market now increasingly looks concerned about the prospect of too much supply", said Norbert Ruecker, head of macro and commodity research at Swiss bank Julius Baer.

Dutch bank ING said an abundance of global supply as well as the threat of economic slowdown meant "cuts over 2019 are unavoidable".

Other reports by Click Lancashire

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